FORM OF
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 23rd day of August, 2000, in Denver, Colorado,
by and between INVESCO Funds Group, Inc. (the "Adviser"), a Delaware
corporation, and INVESCO Advantage Series Funds, Inc., a Maryland Corporation
(the "Fund").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Fund is a corporation organized under the laws of the State of
Maryland; and
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), a non-diversified, open-end
management investment company and currently has one class of shares which is
divided into series(the "Shares"), which may be divided into additional series,
each representing an interest in a separate Portfolio of investments (the
Advantage Fund); and
WHEREAS, the Fund desires that the Adviser manage its investment operations
and to provide certain other services, and the Adviser desires to manage said
operations and to provide such other services;
NOW, THEREFORE, in consideration of these premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. Investment Management Services. The Adviser hereby agrees to manage
the investment operations of the Fund's Portfolios, subject to the
terms of this Agreement and to the supervision of the Fund's
directors (the "Directors"). The Adviser agrees to perform, or
arrange for the performance of, the following specific services for
the Fund:
(a) to manage the investment and reinvestment of all the assets,
now or hereafter acquired, of the Fund's Portfolios, and
to execute all purchases and sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund's
Portfolios, consistent with (i) the Portfolios' investment
policies as set forth in the Fund's Articles of Incorporation,
Bylaws, and Registration Statement, as from time to time
amended, under the Investment Company Act of 1940, as
amended (the "1940 Act"), and in any prospectus and/or
statement of additional information of the Fund, as from
time to time amended and in use under the Securities Act of
1933, as amended, and (ii) the Fund's status as a regulated
investment company under the Internal Revenue Code of 1986,
as amended;
(c) to determine what securities are to be purchased or sold for
the Fund's Portfolios, unless otherwise directed by the
Directors of the Fund, and to execute transactions
accordingly;
(d) to provide to the Fund's Portfolios the benefit of all of the
investment analyses and research, the reviews of current
economic conditions and of trends, and the consideration of
long-range investment policy now or hereafter generally
available to investment advisory customers of the Adviser;
(e) to determine what portion of the Fund's Portfolios should be
invested in the various types of securities authorized for
purchase by the Fund; and
(f) to make recommendations as to the manner in which voting
rights, rights to consent to Fund action and any other rights
pertaining to the Portfolios' securities shall be exercised.
With respect to execution of transactions for the Fund's Portfolios,
the Adviser is authorized to employ such brokers or dealers as may,
in the Adviser's best judgment, implement the policy of the Fund to
obtain prompt and reliable execution at the most favorable price
obtainable. In assigning an execution or negotiating the commission
to be paid therefor, the Adviser is authorized to consider the full
range and quality of a broker's services which benefit the Fund,
including but not limited to research and analytical capabilities,
reliability of performance, and financial soundness and
responsibility. Research services prepared and furnished by brokers
through which the Adviser effects securities transactions on behalf
of the Fund may be used by the Adviser in servicing all of its
accounts, and not all such services may be used by the Adviser in
connection with the Fund. In the selection of a broker or dealer for
execution of any negotiated transaction, the Adviser shall have no
duty or obligation to seek advance competitive bidding for the most
favorable negotiated commission rate for such transaction, or to
select any broker solely on the basis of its purported or "posted"
commission rate for such transaction, provided, however, that the
Adviser shall consider such "posted" commission rates, if any,
together with any other information available at the time as to the
level of commissions known to be charged on comparable transactions
by other qualified brokerage firms, as well as all other relevant
factors and circumstances, including the size of any contemporaneous
market in such securities, the importance to the Fund of speed,
efficiency, and confidentiality of execution, the execution
capabilities required by the circumstances of the particular
transactions, and the apparent knowledge or familiarity with sources
from or to whom such securities may be purchased or sold. Where the
commission rate reflects services, reliability and other relevant
factors in addition to the cost of execution, the Adviser shall have
the burden of demonstrating that such expenditures were bona fide
and for the benefit of the Fund.
2. Other Services and Facilities. The Adviser shall, in addition,
supply at its own expense all supervisory and administrative
services and facilities necessary in connection with the day-
to-day operations of the Fund (except those associated with the
preparation and maintenance of certain required books and records,
and recordkeeping and administrative functions relating to
employee benefit and retirement plans, which services and
facilities are provided under a separate Administrative Services
Agreement between the Fund and the Adviser). These services
shall include, but not be limited to: supplying the Fund with
officers, clerical staff and other employees, if any, who are
necessary in connection with the Fund's operations; furnishing
office space, facilities, equipment, and supplies; providing
personnel and facilities required to respond to inquiries related
to shareholder accounts; conducting periodic compliance reviews
of the Fund's operations; preparation and review of required
documents, reports and filings by the Adviser's in-house legal and
accounting staff (including the prospectus, statement of
additional information, proxy statements, shareholder reports, tax
returns, reports to the SEC, and other corporate documents of
the Fund), except insofar as the assistance of independent
accountants or attorneys is necessary or desirable; supplying
basic telephone service and other utilities; and preparing and
maintaining the books and records required to be prepared and
maintained by the Fund pursuant to Rule 31a-1(b)(4), (5), (9),
and (10) under the Investment Company Act of 1940. All books and
records prepared and maintained by the Adviser for the Fund
under this Agreement shall be the property of the Fund and, upon
request therefor, the Adviser shall surrender to the Fund such of
the books and records so requested.
3. Payment of Costs and Expenses. The Adviser shall bear the costs and
expenses of all personnel, facilities, equipment and supplies
reasonably necessary to provide the services required to be provided
by the Adviser under this Agreement. The Fund shall pay all of the
costs and expenses associated with its operations and activities,
except those expressly assumed by the Adviser under this Agreement,
including but not limited to:
(a) all brokers' commissions, issue and transfer taxes, and other
costs chargeable to the Fund in connection with securities
transactions to which the Fund is a party or in connection
with securities owned by the Fund's Portfolios;
(b) the fees, charges and expenses of any independent public
accountants, custodian, depository, dividend disbursing agent,
dividend reinvestment agent, transfer agent, registrar,
independent pricing services and legal counsel for the Fund;
(c) the interest on indebtedness, if any, incurred by the Fund;
(d) the taxes, including franchise, income, issue, transfer,
business license, and other corporate fees payable by the Fund
to federal, state, county, city, or other governmental agents;
(e) the fees and expenses involved in maintaining the registration
and qualification of the Fund and of its shares under laws
administered by the Securities and Exchange Commission or
under other applicable regulatory requirements;
(f) the compensation and expenses of its independent Directors,
and the compensation of any employees and officers of the Fund
who are not employees of the Adviser or one of its affiliated
companies and compensated as such;
(g) the costs of printing and distributing reports, notices of
shareholders' meetings, proxy statements, dividend notices,
prospectuses, statements of additional information and other
communications to the Fund's shareholders, as well as all
expenses of shareholders' meetings and Directors' meetings;
(h) all costs, fees or other expenses arising in connection
with the organization and filing of the Fund's Articles
of Incorporation, including its initial registration and
qualification under the 1940 Act and under the Securities
Act of 1933, as amended, the initial determination of
its tax status and any rulings obtained for this
purpose, the initial registration and qualification of its
securities under the laws of any state and the approval of the
Fund's operations by any other federal or state authority;
(i) the expenses of repurchasing and redeeming shares of the
Fund's Portfolios;
(j) insurance premiums;
(k) the costs of designing, printing, and issuing certificates
representing shares of beneficial interest of the Fund's
Portfolios;
(l) extraordinary expenses, including fees and disbursements of
Fund counsel, in connection with litigation by or against the
Fund;
(m) premiums for the fidelity bond maintained by the Fund pursuant
to Section 17(g) of the 1940 Act and rules promulgated
thereunder (except for such premiums as may be allocated to
third parties, as insured thereunder);
(n) association and institute dues;
(o) the expenses of distributing shares of the Fund but only if
and to the extent permissible under a plan of distribution
adopted by the Fund pursuant to Rule 12b-1 of the Investment
Company Act of 1940; and
(p) all fees paid by the Fund for administrative, recordkeeping,
and sub-accounting services under the Administrative Services
Agreement between the Fund and the Adviser dated August 1,
2000.
4. Use of Affiliated Companies. In connection with the rendering of
the services required to be provided by the Adviser under this
Agreement, the Adviser may, to the extent it deems appropriate
and subject to compliance with the requirements of applicable
laws and regulations, and upon receipt of written approval of the
Fund, make use of its affiliated companies and their employees;
provided that the Adviser shall supervise and remain fully
responsible for all such services in accordance with and to the
extent provided by this Agreement and that all costs and expenses
associated with the providing of services by any such companies
or employees and required by this Agreement to be borne by the
Adviser shall be borne by the Adviser or its affiliated companies.
5. Compensation of The Adviser. For the services to be rendered
and the charges and expenses to be assumed by the Adviser
hereunder, the Fund shall pay to the Adviser an advisory fee
which will be computed daily and paid as of the last day of each
month, using for each daily calculation the most recently
determined net asset value of each of the Fund's Portfolios, as
determined by valuations made in accordance with the Fund's
procedures for calculating its net asset value as described in
the Fund's Prospectus and/or Statement of Additional Information.
The advisory fee to the Adviser shall be computed at the following
annual rate of 1.50% of the Fund's daily average net assets (the
"Base Fee"). This Base Fee will be adjusted, on a monthly basis
(i) upward at the rate of 0.20%, on a pro rata basis, for each
percentage point in the investment performance of the Portfolio's
of the Fund exceeds the sum of 2.00% and the investment record of
the Xxxxxxx 3000 Index (the "Index"), or (ii) downward at the
rate of 0.20%, on a pro rata basis, for each percentage point
the investment record of the Index less 2.00% exceeds the
investment performance of the Portfolio's of the Fund. The maximum
or minimum adjustment, if any, will be 1.00% annually. Therefore,
the maximum annual fee payable to the Adviser will be 2.50% of
average daily net assets and the minimum annual fee will be 0.50%
of average daily net assets. During the first twelve months of
operation, the management fee will be charged at the base fee of
1.50% with no performance adjustment. During any period when the
determination of the Fund's net asset value is suspended by the
Directors of the Fund, the net asset value of a share of the
Fund as of the last business day prior to such suspension
shall, for the purpose of this Paragraph 5, be deemed to be the net
asset value at the close of each succeeding business day until
it is again determined.
In determining the Fee Adjustment, if any, applicable during any
month, INVESCO will compare the investment performance of the Class
A Shares of the Fund for the twelve-month period ending on the last
day of the prior month (the "Performance Period") to the investment
record of the Index during the Performance Period. The investment
performance of the Fund will be determined by adding together (i)
the change in the net asset value of the Class A Shares during the
Performance Period, (ii) the value of cash distributions made by the
Fund to holders of Class A Shares to the end of the Performance
Period, and (iii) the value of capital gains per share, if any, paid
or payable on undistributed realized long-term capital gains
accumulated to the end of the Performance Period, and will be
expressed as a percentage of its net asset value per share at the
beginning of the Performance Period. The investment record of the
Index will be determined by adding together (i) the change in the
level of the Index during the Performance Period and (ii) the value,
computed consistently with the Index, of cash distributions made by
companies whose securities comprise the Index accumulated to the end
of the Performance Period, and will be expressed as a percentage of
the Index at the beginning of such Period.
After it determines any Fee Adjustment, INVESCO will determine the
dollar amount of additional fees or fee reductions to be accrued for
each day of a month by multiplying the Fee Adjustment by the average
daily net assets of the Class A Shares of the Fund during the
Performance Period and dividing that number by the number of days in
the Performance Period. The management fee, as adjusted, is accrued
daily and paid monthly.
For the first twelve months of the Fund's operations, the management
fee will be charged at the Base Fee of 1.50%, with no performance
adjustment. Thereafter, the Base Fee will be adjusted as described
above.
If the directors determine at some future date that another
securities index is a better representative of the composition of
the Fund than is the Xxxxxxx 3000 Index, the directors may change
the securities index used to compute the Fee Adjustment. If the
directors do so, the new securities index (the "New Index") will be
applied prospectively to determine the amount of the Fee Adjustment.
The Index will continue to be used to determine the amount of the
Fee Adjustment for that part of the Performance Period prior to the
effective date of the New Index. A change in the Index will be
submitted to shareholders for their approval unless the SEC
determines that shareholder approval is not required.
However, no such fee shall be paid to the Adviser with respect to
any assets of the Fund's Portfolios which may be invested in any
other investment company for which the Adviser serves as investment
adviser. The fee provided for hereunder shall be prorated in any
month in which this Agreement is not in effect for the entire month.
Interest, taxes and extraordinary items such as litigation costs are
not deemed expenses for purposes of this paragraph and shall be
borne by that Portfolio in any event. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio
securities, which are capitalized in accordance with generally
accepted accounting principles applicable to investment companies,
are accounted for as capital items and shall not be deemed to be
expenses for purposes of this paragraph.
6. Avoidance of Inconsistent Positions and Compliance with Laws.
In connection with purchases or sales of securities for the
investment portfolio of the Fund's Portfolios, neither the
Adviser nor its officers or employees will act as a principal or
agent for any party other than the Fund's Portfolios or receive
any commissions. The Adviser will comply with all applicable
laws in acting hereunder including, without limitation, the 1940
Act; the Investment Advisers Act of 1940, as amended; and all
rules and regulations duly promulgated under the foregoing.
7. Duration and Termination. This Agreement shall become effective as
of the date it is approved by a majority of the outstanding
voting securities of the Fund's Portfolios, and unless sooner
terminated as hereinafter provided, shall remain in force for an
initial term ending two years from the date of execution,
and from year to year thereafter, but only as long as such
continuance is specifically approved at least annually (i) by
a vote of a majority of the outstanding voting securities of the
Fund's Portfolios or by the Directors of the Fund, and (ii) by a
majority of the Directors of the Fund who are not interested
persons of the Adviser or the Fund by votes cast in person at a
meeting called for the purpose of voting on such approval.
This Agreement may, on 60 days' prior written notice, be terminated
without the payment of any penalty, by the Directors of the Fund, or
by the vote of a majority of the outstanding voting securities of
the Fund's Portfolios, as the case may be, or by the Adviser. This
Agreement shall immediately terminate in the event of its
assignment, unless an order is issued by the Securities and Exchange
Commission conditionally or unconditionally exempting such
assignment from the provisions of Section 15(a) of the 1940 Act, in
which event this Agreement shall remain in full force and effect
subject to the terms and provisions of said order. In interpreting
the provisions of this paragraph 7, the definitions contained in
Section 2(a) of the 1940 Act and the applicable rules under the 1940
Act (particularly the definitions of "interested person",
"assignment" and "vote of a majority of the outstanding voting
securities") shall be applied.
The Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to
evaluate the terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Adviser to receive payments on any unpaid balance of the
compensation described in paragraph 5 earned prior to such
termination.
8. Non-Exclusive Services. The Adviser shall, during the term of this
Agreement, be entitled to render investment advisory services
to others, including, without limitation, other investment
companies with similar objectives to those of the Fund's Portfolios.
The Adviser may, when it deems such to be advisable, aggregate
orders for its other customers together with any securities of the
same type to be sold or purchased for the Fund's Portfolios in
order to obtain best execution and lower brokerage commissions.
In such event, the Adviser shall allocate the shares so
purchased or sold, as well as the expenses incurred in the
transaction, in the manner it considers to be most equitable and
consistent with its fiduciary obligations to the Fund's Portfolios
and the Adviser's other customers.
9. Miscellaneous Provisions.
Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
Amendments Hereof. No provision of this Agreement may be orally
changed or discharged, but may only be modified by an instrument in
writing signed by the Fund and the Adviser. In addition, no
amendment to this Agreement shall be effective unless approved by
(1) the vote of a majority of the Directors of the Fund, including a
majority of the Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting
called for the purpose of voting on such amendment, and (2) the vote
of a majority of the outstanding voting securities of any of the
Fund's Portfolios as to which such amendment is applicable (other
than an amendment which can be effective without shareholder
approval under applicable law).
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal
or made invalid by a court decision, statute, rule or otherwise,
such illegality or invalidity shall not affect the validity or
enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for
convenience and identification only and are in no way intended to
describe, interpret, define or limit the size, extent or intent of
this Agreement or any provision hereof.
Applicable Law. This Agreement shall be construed in accordance with
the laws of the State of Maryland. To the extent that the applicable
laws of the State of Maryland, or any of the provisions herein,
conflict with applicable provisions of the 1940 Act, the latter
shall control.
IN WITNESS WHEREOF, the Adviser and the Fund each has caused this
Agreement to be duly executed on its behalf by an officer thereunto duly
authorized, on the date first above written.
INVESCO ADVANTAGE SERIES FUNDS, INC.
ATTEST:
By:
----------------------
/s/ Xxxx X. Xxxxxxxxxx
----------------- President & Chairman of the Board
Xxxx X. Xxxxx of Directors
Secretary
INVESCO FUNDS GROUP, INC.
ATTEST:
By:
----------------------
/s/ Xxxx X. Xxxxxxxxxx
----------------- President & Chief Executive Officer
Xxxx X. Xxxxx
Secretary
Investment Advisory
Schedule A
REGISTERED
INVESTMENT
COMPANY FUNDS EFFECTIVE DATE
--------------------------------------------------------------------------------
INVESCO Counselor Series Funds, Inc. August 23, 2000
Advantage Fund
Global Growth Fund December 1, 2000
Investment Advisory
Schedule B
INVESCO ADVANTAGE FUND
For the services to be rendered and the charges and expenses to be assumed by
the Adviser hereunder, the Fund shall pay to the Adviser an advisory fee which
will be computed daily and paid as of the last day of each month, using for each
daily calculation the most recently determined net asset value of each of the
Fund's Portfolios, as determined by valuations made in accordance with the
Fund's procedures for calculating its net asset value as described in the Fund's
Prospectus and/or Statement of Additional Information. The advisory fee to the
Adviser shall be computed at the following annual rate of 1.50% of the Fund's
daily average net assets (the "Base Fee"). This Base Fee will be adjusted, on a
monthly basis (i) upward at the rate of 0.20%, on a pro rata basis, for each
percentage point in the investment performance of the Portfolio's of the Fund
exceeds the sum of 2.00% and the investment record of the Xxxxxxx 3000 Index
(the "Index"), or (ii) downward at the rate of 0.20%, on a pro rata basis, for
each percentage point the investment record of the Index less 2.00% exceeds the
investment performance of the Portfolio's of the Fund. The maximum or minimum
adjustment, if any, will be 1.00% annually. Therefore, the maximum annual fee
payable to the Adviser will be 2.50% of average daily net assets and the minimum
annual fee will be 0.50% of average daily net assets. During the first twelve
months of operation, the management fee will be charged at the base fee of 1.50%
with no performance adjustment. During any period when the determination of the
Fund's net asset value is suspended by the Directors of the Fund, the net asset
value of a share of the Fund as of the last business day prior to such
suspension shall, for the purpose of this Paragraph 5, be deemed to be the net
asset value at the close of each succeeding business day until it is again
determined.
In determining the Fee Adjustment, if any, applicable during any month, INVESCO
will compare the investment performance of the Class A Shares of the Fund for
the twelve-month period ending on the last day of the prior month (the
"Performance Period") to the investment record of the Index during the
Performance Period. The investment performance of the Fund will be determined by
adding together (i) the change in the net asset value of the Class A Shares
during the Performance Period, (ii) the value of cash distributions made by the
Fund to holders of Class A Shares to the end of the Performance Period, and
(iii) the value of capital gains per share, if any, paid or payable on
undistributed realized long-term capital gains accumulated to the end of the
Performance Period, and will be expressed as a percentage of its net asset value
per share at the beginning of the Performance Period. The investment record of
the Index will be determined by adding together (i) the change in the level of
the Index during the Performance Period and (ii) the value, computed
consistently with the Index, of cash distributions made by companies whose
securities comprise the Index accumulated to the end of the Performance Period,
and will be expressed as a percentage of the Index at the beginning of such
Period.
After it determines any Fee Adjustment, INVESCO will determine the dollar amount
of additional fees or fee reductions to be accrued for each day of a month by
multiplying the Fee Adjustment by the average daily net assets of the Class A
Shares of the Fund during the Performance Period and dividing that number by the
number of days in the Performance Period. The management fee, as adjusted, is
accrued daily and paid monthly.
For the first twelve months of the Fund's operations, the management fee will be
charged at the Base Fee of 1.50%, with no performance adjustment. Thereafter,
the Base Fee will be adjusted as described above.
If the directors determine at some future date that another securities index is
a better representative of the composition of the Fund than is the Xxxxxxx 3000
Index, the directors may change the securities index used to compute the Fee
Adjustment. If the directors do so, the new securities index (the "New Index")
will be applied prospectively to determine the amount of the Fee Adjustment. The
Index will continue to be used to determine the amount of the Fee Adjustment for
that part of the Performance Period prior to the effective date of the New
Index. A change in the Index will be submitted to shareholders for their
approval unless the SEC determines that shareholder approval is not required.
However, no such fee shall be paid to the Adviser with respect to any
assets of the Fund's Portfolios which may be invested in any other investment
company for which the Adviser serves as investment adviser. The fee provided for
hereunder shall be prorated in any month in which this Agreement is not in
effect for the entire month.
Interest, taxes and extraordinary items such as litigation costs are not
deemed expenses for purposes of this paragraph and shall be borne by that
Portfolio in any event. Expenditures, including costs incurred in connection
with the purchase or sale of portfolio securities, which are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies, are accounted for as capital items and shall not be deemed
to be expenses for purposes of this paragraph.
INVESCO GLOBAL GROWTH FUND
As full compensation for its advisory services to the Fund, the Adviser receives
a monthly fee from the Fund. The fee is calculated at the annual rate of 1.00%
of the Fund's average net assets.
